Gathering round Big Tech: how the market for acquisitions concentrates the digital sector

Carolin Ioramashvili, Maryann Feldman, Frederick Guy and Simona Iammarino

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Small businesses within the digital sector are spread across the USA. However, a significant number of promising small businesses concentrate in major technology hubs, either initially or through relocation. This phenomenon can be attributed to the influential role played by localized markets for financing and acquisition, which is, in turn, driven by the dominant market positions held by major digital platforms. Our research demonstrates a clear pattern of localized acquisition markets, particularly in sectors frequently targeted by the seven largest American digital giants—Amazon, Alphabet (Google), Apple, Microsoft, Meta (Facebook), Oracle, and Adobe, collectively known as ‘Big Tech’. This localization trend has become more pronounced between 2000 and 2020. Our analysis indicates that the gravitational pull of these acquisition markets poses challenges to local initiatives aimed at fostering digital businesses. These efforts would be more successful if measures were taken to limit the market influence of digital platforms.

Keywords: Big Tech; digital start-ups; acquisitions; monopoly; regional inequality (search for similar items in EconPapers)
JEL-codes: F00 O33 R11 R12 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2024-07-01
New Economics Papers: this item is included in nep-com, nep-geo, nep-inv and nep-pay
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Published in Cambridge Journal of Regions, Economy and Society, 1, July, 2024, 17(2), pp. 293 - 306. ISSN: 1752-1378

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Journal Article: Gathering round Big Tech: How the market for acquisitions concentrates the digital sector (2024)
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